Any market relies on the sale of goods and/or services from merchants to consumers. Of course, a consumer may exchange money for desired goods and/or services. Modern society offers an abundance of choices for consumers. For example, a consumer that may be within a certain geographic area may have many choices about where to eat, where to be entertained, and where to buy goods and/or services.
Merchants typically offer goods and/or services at so-called “brick and mortar” establishments, or stores. For example, restaurants offer goods that typically must be housed within a store, due to the limitations of requiring a kitchen and storage of ingredients. Thus, a restaurant may be anchored to a particular location. Although a restaurant may be franchised, any particular restaurant typically does not have the ability to travel to where demand may be higher at any particular time. Moreover, traveling restaurants may find it difficult to determine where demand may be higher at any particular time. Stores that offer other goods and/or services are typically no different than restaurants in this regard.
When a merchant sells a good and/or a service, there are typically fixed costs for the products of all goods and/or services, and marginal costs, which are generally defined as the cost for producing an additional product, whether a good or a service. Prices tend to be set based on what the market will bear for a particular good or service. Of course, a merchant would generally wish that the price of the product is satisfactory to cover the costs of producing the product. However, the demand for a product can be influenced by a host of factors at any given time. It is typically very difficult for a merchant to set the price in response to any given factor that may influence demand. In many cases, factors that may influence the demand for a product are not typically known until too late by the merchant. Even if known, a merchant typically has little control over short term pricing to respond to the influencing factor on demand.
As noted, a product, whether a good and/or a service, has fixed costs and may have relatively low marginal costs. For example, a seat on an airplane may have relatively high fixed costs, but very low marginal costs. Thus, it is in an airlines best interest to fill to capacity an airplane, because it costs very little extra to fill each seat. Thus, an airline will wish to sell all seats, no matter the price, to minimize losses caused by the fixed costs. However, the airline will still wish to maximize revenue. And, of course, the airline will not wish to offer discounted pricing to those customers that, but for the incentive, would have paid the full price.
In another example, a restaurant typically offers its goods based on its current supply of ingredients. Ingredients have a very limited shelf-life, especially if the restaurant wishes to ensure that the ingredients are as fresh as possible, as fresh ingredients tend to create superior foods. Thus, in many cases, a restaurant may purchase ingredients for its foods on the same day that the restaurant intends to offer the goods to consumers to maximize freshness. Typically, a restaurant must anticipate the potential consumer demand at a certain time, such as on a particular day, and project the ingredients needed for that timeframe. Thus, a restaurant, like an airline, may have relatively high fixed costs, but relatively low marginal costs for producing food for customers. However, oftentimes, for various reasons, a restaurant may have a relatively large amount of ingredients with limited shelf-lives, but may not have the demand needed to sell goods made from the ingredients, causing the ingredients to go to waste.
Other merchants may offer similar products that have limited shelf-lives, or may be time-sensitive in other ways. For example, theaters may offer its products at certain times and on certain days. Thus, when a theater advertises a show, it will run the show whether there are many or few patrons in attendance. Moreover, in many cases, fixed costs may be relatively high, considering that theaters must pay the case, crew, rent, etc. independent of the number of patrons in attendance. However, the marginal costs for servicing patrons may be relatively low. Therefore, a theater would wish to have the ability to maximize revenue by being able to offer seats to patrons at discounted pricing. But again, for maximizing revenue, the theater would not wish to provide discounted pricing to those customers that would have paid full price.
A potential solution for merchants to maximize revenue for products, whether goods or services, having relatively low marginal costs is to offer incentives to drive demand. Mostly, incentives may include coupons or vouchers that may be utilized by consumers at the merchants. To help when demand may be low and supply of products may be relatively high, a merchant may allow coupons and vouchers to be utilized, but only at certain times. However, the merchant must still anticipate well ahead of time when these low-demand times may be, because coupons and vouchers are typically preprinted on paper with the days and/or times applicable directly to the coupons or vouchers. While a merchant may be able to utilize historical data to determine when a low-demand period may be, in many cases, low-demand periods may occur for no apparent reason, or for reasons not anticipated by the merchant.
The internet has helped alleviate the problem of having low demand and/or high supply periods for merchants, especially with products having relatively low marginal costs. For example, the website Restaurant.com offers vouchers that may be purchased by a consumer. Incentives may be provided for the consumer to purchase the coupon. For example, a consumer may purchase a voucher for less than the face value. Typically, the vouchers have time limitations for utilizing the voucher at a merchant. For example, many restaurants offer discounted vouchers that may only be utilized on certain days and/or at certain times. However, the limitations are typically predefined and based simply on historical data when the merchant may know when the slow periods are. However, even if slow periods may be generally known, a merchant may find himself busy during a historical slow period, and a consumer may still wish to utilize the coupon or voucher at that time. Thus, the merchant will have increased its demand at a time period when, for reasons unanticipated by the merchant, the merchant may not require the increase in demand.
Consumers typically have time and money to utilize at merchants. For example, a consumer may desire to eat at a restaurant and/or see a theater show at a particular time due to a consumer's schedule. Oftentimes, consumers are sensitive to price. For example, consumers may make decisions on how to spend their money based on perceived value. Thus, consumers may be more apt to purchase goods and/or services from a merchant that offers a discount to the consumers. Oftentimes, consumers utilize preprinted coupons and vouchers, but coupons and/or vouchers may be difficult to find, especially when needed. Oftentimes, consumers do not decide to attend a particular restaurant or see a theater show until they are ready to leave the house. Oftentimes, a consumer may already have left his or her house without knowing where he or she is going, and may be undecided about where to go to spend his or her money. Thus, it may be difficult for a consumer to find or utilize a coupon or a voucher without planning for the excursion well ahead of time.
Consumers also generally respond to larger incentives if they must travel over a large geographic area. For example, a consumer that may be located a relatively large geographical distance from a merchant may value a relatively large discount higher than a consumer that is a relatively small geographical distance from the merchant. For example, a consumer may drive a half hour to attend a restaurant if he or she is assured of obtaining a 50% discount on the meal. However, the same consumer may not drive the same distance if he or she is only assured of obtaining a 30% discount on the meal. Of course, a merchant may not wish to offer a discount to a consumer that is already presently within the store of the merchant, since a consumer that is already present is oftentimes more likely to purchase goods and/or service than a consumer that is a geographical distance away from the store.
Thus, a need exists for systems and methods allowing merchants to offer incentives to consumers to purchase goods and/or services at low-demand periods. Specifically, a need exists for systems and methods allowing merchants having products, whether goods and/or services, having relatively low marginal costs, for example, to increase demand during periods of low demand.
Moreover, a need exists for systems and methods allowing merchants to define discounts to consumers based on geographical distance to the merchant's store. In addition, a need exists for systems and methods allowing merchants to increase demand at low-demand periods and define discounts to consumers based on geographical distance to the merchant's store.
Further, a need exists for systems and methods allowing consumers to search for time-sensitive discounts that may be immediately utilized by the consumer to help the consumers make decisions on where and how to spend their money. Still further, a need exists for systems and methods allowing consumers to utilize their location-specific information, based on their portable electronic devices, to obtain discounts based on their geographic location.
Moreover, a need exists for systems and methods allowing merchants to target discounts, coupons, and/or vouchers to consumers and/or potential consumers based on vector-based targeting if the consumer is mobile. In addition, a need exists for systems and methods allowing merchants to target discounts, coupons and/or vouchers to consumers and/or potential consumers based on historical path-based targeting.